Many of your tax clients have likely already received Letter 6419 from the IRS. This notice offers details about their advance Child Tax Credit payments in 2021, and it will be essential for filing this year. Here’s what you (and your clients) should know about the notice.
What’s in IRS Letter 6419?
The main purpose of the letter is to sum up how much a family received in advance CTC payments in 2021 and how many children were used to make that calculation.
The letter will help reduce filing errors and can reduce confusion for families whose situation changed mid-year. For example, families who opted out of CTC payments after a few months and families who had another child during 2021 may be unsure exactly how much they received in CTC payments and whether they were entitled to more.
What should my clients know about Letter 6419?
Most importantly, your clients should know to keep the letter even if they already know the exact amount of advance CTC they received. They can upload it to the TaxesToGo mobile app or bring it along with their other tax documents when they come into the office to file.
Married couples who file joint returns should expect to receive a letter for each parent, and they’ll need both when they file this year.
What if my client loses their Letter 6419?
If your client misplaces their letter before filing time, they can still find the information on the Child Tax Credit Update Portal. They’ll just need to login with their existing IRS username or an ID.me account.
What will tax preparers do with the information on Letter 6419?
When it’s time to file, the information from Letter 6419 will be entered on Schedule 8812 (Form 1040).
You’ll also need to compare the amount of advance CTC payments they received to the CTC amount they are actually eligible to claim in 2021. In many cases, your clients will be able to claim the remaining half of the credit since advance payments were only made in the second half of the year.
In rarer cases, your client may have received excess CTC payments over the amount of credit they actually qualify for. This might be caused by a significant increase in income from 2020 to 2021 or if they received advance payments for a child who they will not be able to claim on their 2021 tax return. Even if a client did receive excess payments, they may not have to repay them if they meet the IRS’s requirements for repayment protection.
This article is up to date for tax year 2021 (returns filed in 2022).